A faltering global economy, soaring transportation rates, and a growing environmental move to produce goods locally have all put the concept of reverse globalization on the radar of North American manufacturers and shippers.

But a prominent marine consultant told Canadian shippers that reverse globalization or ‘near-sourcing’ is unlikely to become widespread.

“The trend of outsourcing is larger in North America than in Europe,” said Jonathan Beard, managing director of GHK (Hong Kong). “And Canadian Tire, Ikea, Nike, can’t all just move home. I don’t think we’ll see a reigning back of globalization.”

Beard’s remarks were part of the fourth annual Canada Maritime Conference in Vancouver. About 300 delegates came together at the end of September to discuss issues facing Canada’s transportation and logistics industry, and potential solutions for the future.

An underlying theme for the future – and the consensus among most speakers – was that the economy, as it currently stands, is the “new normal.”

“Like any business we need to create and preserve growth options,” said Fred Green, CEO of Canadian Pacific Railway. “Regardless of the economy, it’s important to find ways to grow with a short-term focus. We need to make sure capacity and capability is in place when the economy turns around.”

Part of the new normal is a reduction in trade with China and a reliance on imported goods from Asia. But several speakers pointed out that there are still opportunities in China if companies are willing to rethink their strategies.

“From the ground up in Shanghai, I see a very vibrant economy,” said Naran Andreyev, managing director of Logistics Plus China. “We need to look more at the domestic market in China. Not just as an exporter to us, but looking at doing business in China. They add 30 million people to their middle class every year. We have to start looking at both functions (imports and exports).”

Andreyev also pointed out that there’s a push in China to move more storage facilities and warehouses off the coast and inland, and the infrastructure is actually very good.

“There are huge opportunities for logistics and company growth,” said Andreyev. “They’re adding a new Canada every year and that’s huge purchasing power.”

However, Andreyev did warn that volumes may not return to their previous levels and it is a good idea for manufacturers to find a back-up low-cost country if their Chinese connections are severed for any reason.

“Industrialized markets brought us deep into the recession, but emerging markets were less affected,” said Robert West, principal of trade and transportation with Halcrow. “Expect Brazil to grow more rapidly than other South American countries and Central American economies. Hitch your wagon to a train growing faster.”

West also points out that Brazil has the fifth largest population in the world (191 million people), 37 ports handling 77 percent of the country’s trade, import growth of 21.2 percent per year, a growing middle class, and a positive trade balance. It’s a great incubator of private businesses, he said.

With the expansion of the Panama Canal expected to be finished in 2014, trade with South America may become even more attractive. The canal, which will stay open during the entire construction process, will be able to handle 12,000 TEU vessels after the expansion, up from the current limit of 4500 TEU vessels.

“The east U.S. to Asia is the top route through the canal, followed by the east U.S. to west South America,” noted Bruce Lambert, executive director with the Institute for Trade and Transportation Studies. “All Panama agreements with ports are on the U.S. east coast. There are none on the west coast and none in Canada, so it shows where Panama thinks their future is.”

An increase in shipping would be welcome by ocean liners, no matter what waters are utilized.

“Shipping companies thought growth would continue and ordered too many ships,” said Ken Low, director of strategic planning with Seaspan. “The excess supply will get rationed and push order books back.”

In late-September there were 536 ships, of all sizes, laid up around the world. There were no new orders placed in the second and third quarters of 2009, and Low predicted there will end up being problems just financing the current orders.

“Ship carriers are facing a supply-demand dilemma,” said Joseph Lee, general manager operations with China Shipping Agency. “We reduce vessels, cut services and join hands with other carriers to cut costs. Our problem is not increasing our volume. By trimming we are hoping we can push up rates. It will be a cold winter, but we’re hoping to get back early next year.”